Zimbabwe has the potential to be a leading producer of lithium, which has so far attracted more interest than any other of its minerals, Zimbabwe's new Minister of Mines and Mining Development Winston Chitando said on Tuesday.

He said he had last week reached a deal with a small listed company, which was expected to generate revenue of $1.4bn over eight years from a lithium project.

Chitando took office after Emmerson Mnangagwa became president in November 2017 when the military took charge and Robert Mugabe resigned after 37 years in office.

To lure foreign investment into a mining sector that he says is under-capitalised and under-explored, Chitando has announced changes to mining laws, limiting indigenisation rules that mandate majority ownership for the state to just diamonds and platinum.

"Most of the enquiries have been about lithium," he said on the sidelines of a mining conference in Cape Town. He added he could not give details of the deal signed last week until an official stock market announcement was made.

Lithium is in demand as a battery metal needed for the shift to electric vehicles and renewable power, although some analysts say the market could become oversupplied as the pipeline of projects builds up.

Huge mining potential

"Zimbabwe will become a very significant producer of lithium," Chitando said. He added that he was not worried about oversupply of "the mineral of the future".

Other minerals attracting interest are gold, as well as coal and coal-bed methane, which miners pursue as cheap sources of power, he added, noting that the biggest problem for mining is the lack of capital.

Zimbabwe's economy is suffering acute shortages of cash dollars, increases in prices of basic goods, high unemployment and low levels of foreign investment but President Mnangagwa last month promised to safeguard all investments in the country.

On its website, Zimbabwe's mining ministry says the country has "huge mineral potential characterised by about 60 economic minerals whose commercial profitability has been proven".

Zimbabwe's Great Dyke - a roughly 300 mile long rock formation which bisects the country from north to south - holds the world's largest high-grade chrome resources and the world's second largest resource of platinum group metals. Zimbabwe also has significant reserves of copper, nickel and lithium.

Many companies have said they are very interested in Zimbabwe and compare the country's Great Dyke to South Africa's mineral-rich Bushveld complex, but they are also waiting for policy certainty and say bureaucracy needs to be simplified.

Apart from meeting investors in Cape Town, Chitando said Zimbabwe, once one of Africa's most promising economies, will host a mining conference at the end of this month.